Under the Affordable Care Act (ACA), employers with 50 or more employees are required to provide their employees with health insurance coverage for preventive care, including various services related to reproductive health—birth control among them. Although strictly religious organizations are exempted from this requirement, profit-making corporations are not. The owners of the companies that appeared before the Supreme Court—Hobby Lobby from Oklahoma and Conestoga Wood Specialties Corporation from Pennsylvania—are seeking also to exempt non-religious, profit-making companies from the coverage requirement where those companies’ owners have religious objections to birth control. The Supreme Court heard an extended 90 minutes of oral argument in the combined cases Sebelius v. Hobby Lobby and Conestoga Wood Specialties Corp. v. Sebelius to determine whether profit-making companies owned by individuals with religious objections to contraception must be exempted from the ACA contraception coverage requirement.

The corporations are raising both constitutional and statutory objections under the First Amendment’s Free Exercise of Religion clause and the Religious Freedom Restoration Act (RFRA).

A slippery slope & a piecemeal approach

Throughout oral arguments, several Justices—particularly Justices Sotomayor, Kagan, and Ginsburg—raised concerns about the broad implications of a decision exempting for-profit corporations from covering birth control in their employees’ health insurance due to religious objections. They indicated that the implications led to two issues: 1) would employers be allowed to question other equality laws based on religious objections, and 2) would employers be allowed to preclude coverage of other medical treatments based on religious objections? At one point, Justice Kagan even said that “you would see religious objectors come out of the woodwork,” seeking religious exemptions from sex discrimination laws, minimum wage laws, family leave laws, and child labor laws.

To differentiate contraception coverage from other services, Attorney Paul Clement attempted to label contraception as a “religiously sensitive” issue. Justices Sotomayor and Kagan took issue with Clement’s argument. In the clip below, you will hear Justices Sotomayor and Kagan ask whether, if the Court were to exempt employers from the birth control coverage based on their religious beliefs, it would also allow employers to preclude other services based on religious objections, such as blood transfusions or vaccinations. Justice Kagan states that Clement’s approach would lead to allowing one religious group to “opt out of this and another religious group could opt out of that and everything would be piecemeal and nothing would be uniform.”

The battle of the bills

During oral argument, Clement said that when Congress passed RFRA in 1993, it intended the bill to apply “broadly to any exercise of religion by any person.” In so doing, Clement argued, Congress intended for RFRA to include a “substantial burden” test that asks whether the policy or law being challenged places a substantial burden on an employer’s exercise of religious freedom. In the clip below, Justice Ginsburg reminds Clement that the Senate already dealt with the question of whether employers should be allowed to deny health insurance coverage based on religious objections. Justice Ginsburg, in discussing the introduction—and subsequent rejection—of a “conscience amendment” to the ACA in 2012 is referencing the Blunt Amendment. The Blunt Amendment would have enabled “secular employer and insurance providers to deny coverage on the basis of religious beliefs.” Justice Ginsburg here makes the point that had Congress intended to exempt employers from providing coverage based on religious beliefs, Congress would have likely done so by passing the Blunt Amendment. Therefore, Justice Ginsburg is essentially saying that the rejection of the Blunt Amendment to the ACA is more instructive of Congressional intent regarding employers’ religious objections than the passage of RFRA in 1993.

Note: In the clip, Clement begins by referencing RFRA, followed by a question from Justice Ginsburg regarding how easily RFRA passed. She then transitions to discussing the Blunt Amendment when she says, “there was an effort to adopt a conscience amendment” in 2012.

Do corporations really face a “substantial burden”?

Justices Kagan and Sotomayor questioned Clement on whether corporations truly face a substantial burden in this situation. They pointed out that the cost to accommodate employees’ access to contraception would be minimal, whether the employers choose to pay for the insurance or whether they choose to instead pay the tax for not insuring their employees. In fact, Justice Sotomayor notes that paying the tax for not providing insurance at all would be “a lot less than the cost of health insurance.” The clip ends on a lighthearted note; Justice Sotomayor reminds Clement that the money employers must pay for not providing health insurance coverage is a “tax,” not a “penalty,” as Clement refers to it. Chief Justice Roberts—who memorably wrote the opinion upholding the ACA by finding that Congress, under its taxation powers, can require employers to pay a “tax” when they do not provide insurance coverage—elicited laughter from the audience by chiming in that Justice Sotomayor is right about calling it a tax, not a penalty.

Should religious beliefs trump?

Who You'll Hear: Justice Anthony Kennedy

During Clement’s argument, Justice Kennedy raised the question of the employees’ rights. He asked whether, when employees do not agree with their employer’s religious beliefs, the religious beliefs should be allowed to trump the employees’ right to healthcare. In the clip below, you will hear Justice Kennedy raise these questions.

A direct and tangible harm to women

Who You'll Hear: Justice Elena Kagan

Following a long discussion about Congressional intent behind RFRA, the Court’s interpretations of religious statutes, and whether the employer who is compelled to provide birth control to “third parties” (i.e., women employees who are denied a reproductive health service) bear a heavier burden, Justice Kagan forcefully makes a point on behalf of women employees. Referring to the ACA, she says that Congress has given women a statutory entitlement to contraceptive coverage. “And when the employer says, ‘no,’” to coverage, “that woman is quite directly, quite tangibly harmed.”

Why shouldn’t corporations have religious rights?

Part of the government’s argument is that RFRA does not apply to profit-making companies, and therefore the corporations in this case lack standing to bring suit. In the clip below, Justice Alito questions Solicitor General Donald Verrilli on this point, asking what it is about the corporate form that is inconsistent with free exercise of religion claims.

Distinguishing closely held corporations

Chief Justice Roberts implied the possibility of a narrow ruling based on the fact that the companies in this case are both closely held corporations. Closely held corporations—which are corporations that have more than 50 percent of their stock value owned by a small number of individuals—may not pose the same problems with respect to determining the corporation’s “religion” as large, publicly traded corporations do. Therefore, Chief Justice Roberts suggests that perhaps determining how RFRA applies to large publicly traded companies may be a question for another case.

The Department of Health and Human Services created the exemptions, not Congress

During oral arguments, Justice Kennedy raised the point that it was the Department of Health & Human Services (HHS)—an administrative agency that is a part of the executive branch—that created the contraception coverage requirement, not Congress. The ACA called on HHS to work with the Institute of Medicine to decide which services needed to be included in health plans to satisfy the ACA’s requirement that women’s preventive care be covered without copay. In this clip, Justice Kennedy asks, with respect to an issue as significant as the First Amendment, “shouldn’t we indicate that it’s for the Congress, not the agency to determine” the exemptions to the ACA’s contraception coverage requirement. He wonders aloud, “What kind of constitutional structure do we have if the Congress can give an agency the power to grant or not grant a religious exemption?” Solicitor General Verrilli responds that the government has only given churches an “exemption” because of their “special solicitude” under constitutional law. Nonprofit religious organizations receive “accommodations” rather than “exemptions,” Verrilli argued, because employees still access birth control, just not directly from their employer. Similarly, Verrilli argued that employers with fewer than 50 employees are not exempt either; if they provide insurance, they are subject to the same requirements as larger corporations.

If corporations can have a race, why not a religion?

Chief Justice Roberts wondered why, if a corporation has a race for the purpose of discrimination laws, it cannot similarly have a religion. Although Verrilli responded that corporations may bring racial discrimination claims as a person, he did not concede that that means corporations have a race; moreover, he stressed that in those cases, only the word “person” is being interpreted, rather than the exercise of religion, which is at issue here.

Why shouldn’t the government just pay for it?

Justice Breyer was silent for most of the oral arguments. He first spoke up during Solicitor General Verrilli’s argument, and asked—with the qualifier, “My question reflects no point of view at all on my behalf”—whether the government could pay for the contraception coverage as a reasonable “less restrictive means” of ensuring that women employees have access to birth control in their health insurance. Verrilli responded that this kind of potential accommodation was only raised by the corporations for the first time that morning during oral arguments, and that requiring the government to pay for the contraception coverage would amount to a “very open-ended increase in the cost to the government.”

Justice Kennedy brings up abortion

In this clip, you hear Justice Kennedy telling Verrilli that the government’s argument could lead, in principle, to requiring a for-profit corporation to “pay for abortions.” Verrilli responds that it is true that the government’s legal theory is that corporations are not “persons” under RFRA, and so for-profit corporations do not have the ability to challenge a policy in court based on religious objections. “But,” he tells the Justices, “there is no law” that requires companies to pay for abortions “on the books. In fact, the law is the opposite.”